UNCLAS SANTIAGO 001118

SIPDIS
STATE FOR WHA/BSC, WHA/EPSC AND EEB/ESC

E.O. 12958: N/A
TAGS: ENRG ECON EINT TRGY DOE CI
SUBJECT: CHILE'S RENEWABLE ENERGY WEEK INCLUDES U.S. EXPERTS IN SOLAR
AND BIOFUELS

REF: MONTEVIDEO 616; SANTIAGO 641; SANTIAGO 496


1. SUMMARY: Chile, which is looking to boost its use of renewable
energy as a means to improve energy security and combat the effects
of climate change, hosted a week of renewable energy events October
5-9 focused on two areas where Chile appears to have comparative
natural advantages: solar and algae-based biofuels. The prominent
participation of U.S. energy experts -- including two sponsored by
the USG -- reflects robust U.S.-Chile energy cooperation. END
SUMMARY.




2. Background: Chile is a country abundant in renewable energy
possibilities, unrivaled solar resources in the northern Atacama
desert, over 4,200 kms of coastline with large tidal differentials,
as well as wind and geothermal potential. In March 2008, Chile
passed a law requiring electricity generators to produce at least
five percent of their energy from non-conventional renewable energy
sources (this excludes large-scale hydroelectric projects over 20
MW) by 2014 and 10 percent by 2024. Over the last year and a half,
Chile's Economic Development Agency (CORFO) and its National Energy
Commission (Commission Nacional de Energia - CNE) have been working
to create favorable conditions for renewable energy development,
including a transmission fee exemption for small scale generators
and developing financial instruments, loan guarantees, grants for
electricity transmission lines to connect renewable energy projects
to the grid, grants for geothermal drilling, etc.




3. Along with CNE, CORFO is developing two solar pilot plants, one
using photovoltaic (PV) technology and another using concentrating
solar power (CSP), and launched a renewable energy center (REC) in
October to act as an antenna for new renewable technologies and
provide assistance to project developers (refs b and c). During
President Bachelet's visit to Washington in June 2009, Chile's CNE
and the U.S. Department of Energy (DOE) signed a Memorandum of
Understanding (MOU) on Clean Energy Technology Cooperation to
facilitate collaboration on energy efficiency and renewable energy,

including technical assistance for Chile's new REC and CSP pilot
project.




4. To promote investment in Chile's renewable energy sector, CORFO
has also sponsored a number of workshops and seminars. The largest
was the Fourth International Conference on Renewable Energy
Investments in Santiago, September 7-8. The international event
brought together over 1,000 private investors, carbon market
intermediaries, national project developers, service suppliers,
banks, public agents and experts in the renewable energy and CDM
sectors. Although smaller in scale, Chile's "Renewable Energy
Week" in October featured two major seminars on technologies the
country may have a natural advantage in developing: solar and
algae-based biofuels. End background.



Launch Features Nobel-Prize Winning Nuclear Physicist Touting
Renewables

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5. Energy Minister Marcelo Tokman kicked off Chile's 2009
Renewable Energy Week with a comprehensive overview of Chile's
energy challenges and efforts to secure its energy supply. Tokman
described how high energy prices combined with drought and reduced
supplies of natural gas from Argentina to create the "perfect
storm" in 2008, which forced Chile to work to strengthen its
institutions, increase energy efficiency and begin to develop the
country's vast renewable energy potential. He highlighted pending
government solicitations for two solar pilot plants. The launch
concluded with the Energy Minister and other luminaries cutting a
ribbon to open "Energiza Chile," an exhibition of the country's
renewable energy associations, projects and technology providers.




6. Opening remarks by Nobel-prize winning physicist Carlo Rubbia
focused on the potential of solar energy as a source of


hydrogen-based power. Rubbia also participated in a panel with
three Chilean parliamentarians, who spoke about how Chile's move
from petroleum-based sources to renewables is hampered by a lack of
institutions, human resources and incentives.



Solar Seminar Highlights Dueling Technologies; Overcoming Technical
Challenges

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7. An international solar seminar co-hosted by CNE and the U.N.'s
Economic Commission on Latin America and the Caribbean (ECLAC)
featured keynote speakers Stanford Ovshinsky, a U.S. inventor, and
Dr. Rubbia. The speakers emphasized competing visions for
harnessing solar power. Rubbia focused on concentrating solar
power (CSP), and Ovshinsky's presentation highlighted his lifelong
efforts to develop efficient photovoltaics (PV), including
mass-production of thin solar films, and developing the
rechargeable nickel-metal hydride (NiMH) batteries used in hybrid
vehicles and many consumer electronics.




8. The solar seminar also featured developments in solar
technologies by international experts from Germany and Spain, as
well as various solar companies presenting on large-scale
commercial projects. U.S. expert Craig Turchi, Director of a
project to transform the CSP market at the U.S. Department of
Energy's National Renewable Energy Lab (NREL), provided a
pre-recorded presentation on various solar technologies and the
challenges of storage, costs, environmental impacts and
transmission.



International Perspectives on Biofuels from Algae - Chile's
Potential

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9. A seminar on innovations in algae-based biofuels followed the
solar seminar. A central theme for the event was the potential for
Chile to produce biofuels from algae given its rich marine
resources, high levels of solar radiation (required for rapid
growth of these organisms), and the fact that the country does not
grow many of the food crops (e.g., sugarcane) generally associated
with second generation biofuels. The seminar covered both micro-
and macro-algae technologies and featured studies of the many
different factors that impact biofuel production from these
sources.




10. Two U.S. biofuels experts, Bryan Willson from Colorado State
University (CSU), and Richard Simmons, a science and technology
fellow at the U.S. Department of State, joined a panel on the
"International Vision of Second Generation Biofuels" with
representatives from the International Energy Agency (IEA), the
European Commission and the Interamerican Development Bank.
Simmons, an engineer who has worked on reducing internal combustion
engines' emissions and fuel consumption, provided the U.S. and
regional policy context by tracing the stages of first generation
biofuels. He noted that ethanol and biodiesel products are
commercially viable because certain countries, i.e., the U.S. and
Brazil, committed to innovation and invested resources into
biofuels research and development (R&D). He opined that second
generation biofuels will require increased levels of international
cooperation. Willson, Director of CSU's Engines and Energy
Conversion Laboratory and owner of his own company, Solix Biofuels,
provided insights from his university and private sector
experiences developing micro algae-based biofuels and delved into
the technical innovations needed to make algae-based products
commercially viable.




11. InnovaChile, a program supported by CORFO, highlighted that it
has provided approximately $6 million to create several


public-private consortiums to study/develop second generation algae
derived biofuels. CORFO plans to assign 85% of its FY2010 funds to
energy projects, including biofuels development.



U.S. Experts Make the Rounds

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12. The Embassy helped program the U.S. biofuels experts in
addition to their participation in the renewable energy seminars in
Antofagasta. Willson gave a presentation on low-cost biofuels
production from micro algae to the University of Santiago de Chile.
He also met with representatives of the CNE, CORFO, and other
government officials, along with university and industry
representatives of several petroleum companies to exchange
experiences and discuss development of a biofuels cluster in Chile.
In addition to outreach with industry and academic representatives,
Simmons held in-depth discussions with Fundacion Chile, a
non-profit innovation incubator and think tank, and spoke at a
roundtable discussion on "Bridging the Biofuel Generation Gap"
hosted by post's Green Committee.




13. Ambassador Simons hosted Ovshinsky and a group of educators
and innovators for a breakfast discussion on October 8. Ovshinsky
noted that Chile has a natural resource in the sun that is much
more powerful than oil and plenty of room in its northern desert
for solar collectors. Citing the two solar pilot projects, he
praised Chile for having the vision to make this happen, and toted
the value of investing in education to promote innovation.
Following the breakfast, Ovshinsky and the Ambassador participated
in a panel on climate change at the Democracy and Development
Foundation of former Chilean President Ricardo Lagos.



Public-Private Association to Develop Renewable Energy Capacities
in Antofagasta

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14. On the margins of the solar conference, ESTH Officer and EPOL
Specialist met with the Chilean Chamber of Construction -
Antofagasta (CChC-A) chapter's president, Carlos Arenas, along with
CChC-A staff and associated members. The group outlined efforts to
organize business sector representatives and academics into a
public/private consortium to promote R&D in non-conventional
renewable energy in the region. They requested U.S. assistance in
facilitating access to updated research and technology related to
renewable energy (e.g., net metering, concentrated solar panel
systems), as well as establishing ties with U.S. agencies, research
laboratories (including NREL), and universities to identify
academic, technical, and student exchange programs.




15. COMMENT: Since 2008, Chile has made progress on promoting
renewable energy and has been somewhat successful in developing
commercial wind and run-of-river hydroelectric projects. However,
Chile is nowhere close to realizing the full energy potential of
its rich array of natural resources and clearly recognizes the need
to build international relationships to attract investment and
innovation in renewable energy technologies in which it may have a
comparative advantage. The four U.S. experts who participated in
the week-long series of events in Antofagasta did an impressive job
of showcasing U.S. innovation, policy and technologies in both
solar and biofuels. The strong U.S.-presence reflects on-going
collaborative efforts under both the new U.S.-Chile Clean Energy
MOU and our long-standing Science and Technology agreement. These
types of exchanges are critical as Chile continues to develop the
policy framework needed to foster its renewable energy sector. END
COMMENT.
SIMONS